An assortment of all things interesting (and possibly useless) in the legal profession

Monday, February 16, 2009

The misguided emphasis on 1L grades?

“All that stuff about grades is true. You gotta work like hell. No kidding. No one jokes about grades. I mean try getting a job without them. It’s all stacked against you if you don’t have the grades.”-The Paper Chase

Sage words from Mr. Hart’s Resident Assistant—in law school grades are everything when it comes to jobs. The system is fairly simple: employers have grade cut offs based on the candidate’s school, and make threshold hiring decisions by weeding out those who do not “make the grade” (pun intended).

Of course, the system does not care about all grades—the premium is placed (almost) exclusively on 1L grades. At least in the law firm context, interviewing for coveted “summer associate” positions takes place in the fall of 2L year, comfortably before any 2L or 3L grades are accessible to employers. Permanent offers, at least before the economy collapsed, have generally been a sure thing. At worst, summers could ensure they snagged a post-graduation job by producing good work product during the extended interview that “summering” at a firm fundamentally is.

So 1L year has been, and remains, the most important year of law school as far as employment prospects are concerned. Those who escape “1 Hell” unscathed have their pick of firms, while the lower end of the curve scrounges to get a job; a feat that, depending on the reputation of the school attended, could be fruitless. There is instinctive appeal to this process: law school does, after all, take every opportunity to separate, divide and classify. Why should the implications of 1L grades be any different? Firms need some basis to distinguish, and surely first year grades are as good a barometer by which to do so as any.

This answer is not satisfying, though, because the current system entails employers making important decisions on the basis of one-third of the total data. This does not benefit any interested party. The employers who, based on the fact they're looking to grades in the first instance, must believe that grades are a good indication of ability to perform (more on this later) are forced to make important hiring decisions without knowing all the facts. Students, by contrast have their hopes and job prospects compressed into one, high stakes year.

This latter fact is particularly troublesome in light of the current hiring system's structure. Indeed, the fact that students face the pressure they do during 1L makes 1L grades an even weaker predictor of future performance. Grades, as a general matter, can be volatile at the margins. Add a little pressure during a time of immense adjustment, and all bets are off. Firms thus make hiring decisions based on incomplete data that is often corrupted by the hiring process itself.

As with many things, it is easier to state the problem than to solve it. However, I offer the following as potential solutions to be ironed out:

1) Firms can strongly consider 2L grades when deciding whether to give permanent offers. While this would entail firms losing money by investing in candidates that they would not ever consider hiring, it could open up slots for people who performed well in upper-level courses after a poor 1L year.

2) Make all law school courses pass/fail, and allow students to distinguish themselves through practical skills-based competitions. This would accord with the more pragmatic approach Nima suggested. Obviously, one (potential) downside to this proposal is that it would exacerbate the emphasis firms place on school reputation. To try to address this problem, schools could make 1L grades pass/fail, and have graded upper level courses using the model most schools currently employ (e.g. students selecting their own classes, with a relaxed or abandoned curve).

3) Make 1L courses pass/fail, and impose mandatory 2L courses on students with the rigid curve that is a staple of 1L year. This proposed solution would let students ease into law school, and take the pressure off of grades initially. Hiring decisions during fall OCI would (presumably) be made based on school reputation and skills competitions. While employers would care a great deal about 2L grades, they would likely not, for fiscal reasons, choose to refuse offers to summers who performed poorly during 2L. This approach would, however, likely lead to reduced summer classes thereby allowing additional slots for those who performed well during 2L year. An obvious problem with this potential solution is that it still emphasizes looking to one-third of the grades package. But it is better than the current approach in that the grades to be depended on would not be detrimentally influenced by students adjusting to a new environment.

Of these options, I think option #1 is the worst and option #3 the best. Ideally, however, there would be a better way to handle this problem than any of the proposed solutions I list. Perhaps the reason it is so hard to find a satisfying solution to the problem is that there is no problem in the first instance? My entire discussion assumes that grades are heavily depended on by employers because they are a worthwhile tool for distinguishing how candidates will ultimately perform as attorneys. It may well be that, as alluded to above, grades are utilized simply because employers need to draw the line somewhere. If that is the case, does it even matter that the statistics depended on are (probably) unreliable and (definitely) incomplete?

15 comments:

I disagree strongly with you regarding option no. 1 being the "worst". If firms are going to care about grades at all (and I think its good you point out that the dependence may be arbitrary) they should be honest about it, and care about 2L and 3L grades too. The money lost is minute in comparison to that which would be spend by extending a fulltimn offer.

I think that a possible (4th) option would be to have a "second" OCI at the end of the 2L year. This option could potentially fall victim to the critique mentioned in your post--that we are now looking at only 2/3 of the picture. However, barring problems in getting grades out, I think this allows for students who may take a little longer to get the feel of the process to show to firms and other employers that they are talented and qualified.

This is a very glib view of the purpose of 1L grades. The way OCI is set up at most firms is a market dictate. 1L grades are the only (and I emphasize only) way to generally align with the demands of the market; this is particulary true at my firm.

Interesting view, Craig. I still wonder, though, whether emphasis on 1L grades is really a "problem." So hiring decisions are based on 1/3 of a student's law school performance? Yes- 1L year is a particularly stressful period and this may affect a student's performance. But shouldn't firms covet those who excel in high pressure scenarios?

While the three options you propose are attractive theoretically, I don't know if any of them allow firms to properly make educated hiring decisions. Is the emphasis on 1L grades ideal? Perhaps not. But, in my opinion, it's necessary for firms to differentiate those they'd like to hire from the mass of law students.

I agree with your general criticism; if the point of firms looking to grades is to see how students fare under pressure, 1L grades would certainly be a very helpful--albeit, incomplete--gauge.

What would be helpful to know is *why* firms are fixated on grades at all; is it, as I've suggested (and Josh has implied) that it's as good an arbitrary basis by which to differentiate one student from the next as any? Or do grades actually speak to ability to perform entry-level associate duties?

I think 5:10 was speaking directly to these questions, but--regrettably--I did not understand the substance of the point being made.

I have a question that is somewhat off-topic-- what if the ABA, in addressing the ridiculousness of BigLaw associate compensation created a mandated approach similar to that used in the NBA. For example, in the NBA, the League determines how much each drafted player makes and it mandates a 3-year window for the contract. This way, the NBA and the teams don't run into the problems that face early 1st Round NFL draft pick problems like Cedric Benson.

Here's what my proposal to the ABA would be: Find a way to create a mandate of a 90/110/135 scale for each of the V100 firms. After 3 years, the firm and the experienced attorney can negotiate on a personal basis, such that the compensation package would reflect what the attorney actually brings and would bring to the firm. In return, the BigLaw firms would be able to cut costs and still harbor and nurture their talent.

I think this is an interesting solution to the problem my post speaks to--namely, that firms are preventing themselves from obtaining talented people by focusing on 1L grades to the extent that they do. I made this argument assuming that grades, as a whole, were a good indication of ability to perform entry (and eventually upper) level associate work. As has been discussed, it is not clear that this assumption is any way warranted.

Your idea regarding fixed compensation at the outset would be a good solution to the problems we've discussed, but there are some obvious new problems it raises:

1) Unless every firm is willing to go along, problems will undoubtedly emerge. I don't see how Vault could require firms to do this. This solution has tragedy of the commons written all over it.

2) Law school tuition is very, very costly. The reason being, of course, that students can pay off their tuition with the high salaries entry-level associates command. Whether tuition will remain at peak levels in the wake of the economic collapse remains to be seen, but implementing your suggestion would necessitate re-thinking law school tuition entirely.

To bulid on what Mastershake said, what about fully adopting the NBA model and having a draft? The "top" firms, as selected by Vault of course, pick last while the lower ranked firms get to pick candidates according to a lottery that determines their order. This way, all the firms can be on equal footing.

Yes, because Lawyers would really value havign their compensation capped.

Even the most ardent left-wing nutcase lawyer would cry "communism!" And not like they did at the campus rally the week before.

Comparing the NFL/NBA situations is a false divide.

The NBA can get away with the 3-year cap because it is far and away the leading basketball league. Euro-leagues don't come close in terms of compensation/exposure/endorsements.

More importantly, the NBA contracts are guaranteed, which is a big factor. So the players just take it, knowing they'll get a fat contract even if they break their hips the 1st game of the season.

In contrast, NFL players can scoot to Canada, which, while not a serious threat, pays decent money and has decent exposure that can back door to the NFL.

More importantly, the NFL has very little in terms of guaranteed contracts. If you break your hip on the 1st day, you're out the door with no more pay. So it behooves a 1st rounder to push for more in his contract and sit out if necessary--no injury is better than playing under poor conditions and the chance of injury.

In Law, we don't break hips, and our careers don't max out at 35 or 40. Plus, there is no monopoly firm running the law ranks---Skadden is not the NBA or the NFL; we can hop to other firms if we're in that league, or government offices, mid-sizes, etc.

I've put far too much thought into picking apart these metaphors. I need to go watch a game.

@ Craig . . . if you think entry-level associates command a salary commensurate with the cost of tuition you are seriously mistaken. . . check out the cost of law school buddy. . . this blog is a joke if you have clowns comparing 3 L's with entry-level salaries.

Not sure what you're getting at, exactly. I have never said, nor has anyone else, that entry-level associates "command a salary commensurate with the cost of tuition[.]" I am aware that there is a bimodal distribution for law school salaries, and that many graduating law students do not come close to making up the costs of tuition.

Having said that (and although I concede a lack of knowledge of economics), I do think that law school tuition is as high as it is because of the compensation structure at law firms. Given the cost, the demand for a law school education would drop severely if students did not have reasonably good prospects of obtaining a job that would make the investment of going to law school pay for itself (and more). For this reason, I think, a lot of lower ranked schools dole out considerable scholarships to lure students in.

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